By Michael Hudson
Culture is one of the key strengths many credit unions have leveraged over time to create a foundation for long-term success. Like the businesses featured in Jim Collins' best-selling book Good to Great, many credit unions were built upon the guiding premise of getting the right people in the right seats on the bus.
It made sense and it worked: Find committed believers in the credit union concept, hire them to perform the functions needed to run the business, and watch the credit union grow.
Then things changed.
Fields of membership expanded, product and service offerings increased, the workforce became more diversified, competition intensified, and the core credit union culture became much more fragmented.
As a result, what had been an implicit competitive advantage for the industry virtually disappeared within many credit unions.
Granted, I may be overstating the case slightly to make a point, but the reality is that many credit unions did in fact create their success by building a culture that differentiated them from other players in the financial services marketplace. And many of those same credit unions have struggled in recent years because the alignment between their culture and their strategy has been lost (or at least seriously diluted).
Some would argue that what happened within the credit union industry in this regard was inevitable and that such alignments of culture and strategy are no longer relevant or sustainable.
But the real world evidence doesn't support that. Take, for example, the story of Zappos (Delivering Happiness by Tony Hsieh, Business Plus, 2010)—a company that demonstrates both the power and relevance of aligning culture and strategy to create long-term success.
The simple fact is that when you align culture—the blend of the values, beliefs, taboos, symbols, rituals and myths all companies develop over time—with strategy—the overall purpose and scope of the business to meet stakeholder expectations—you are able to define and defend your competitive position.
It works because it provides all the stakeholders with a clear understanding of what the business believes in and what it will and will not do.
It works because it creates a level of clarity that supports adaptation to changing conditions and circumstances.
And it works because it engages people on an entirely different level, where they see themselves and the business in a context that reaches beyond just day-to-day stuff that has to get done.
When employees, customers, suppliers, distributors, and anyone and everyone who touches the business in any way understand this, they become part of the story and help to expand the impact of the business.
How can your credit union become Zappos-esque in your use of culture and strategy? Stay tuned for my next post, "Aligning Culture and Strategy for Competitive Advantage."
Michael Hudson, Ph.D., founder of Credit Union Strategy, has been a credit union member for more than 50 years (since he was three months old). He facilitates strategic planning processes, leadership retreats, and team building experiences for credit unions across America.
